New Forests has entered into a joint venture with Chinese group Sinotrans to co-invest in a New Zealand forestry plantation.
The forestry investment manager has bought a 38% stake in Wenita Forest Products, a company currently jointly-owned by Sinotrans and US asset manager The Rohatyn Group (TRG).
The value of the deal was not disclosed.
The Sydney-based manager has acquired the TRG stake for its AUD707m (€448.7m) Australia New Zealand Forest Fund 2 (ANZFF).
Logistics group Sinotrans retains its 62% interest in Wenita.
David Brand, New Forests’ CEO, told IPE Real Assets that while New Forests has extensive trading relationships with Chinese companies, this is its first joint investment with a Chinese group.
He said New Forests had also acquired 100% of the Otago Land Company, which holds 22,500 hectares of freehold land on which Wenita operates via forestry rights.
With the Wenita transaction, New Forests has fully deployed capital raised from superannuation funds and global institutional investors for ANZFF 2.
TRG Partner Ian Jolly said: “At the time of (our) acquisition, the Wenita estate was depleted, had very high operating costs and relatively poor yields.
“During our ownership, inventory has recovered, yields are greatly improved, and operating costs have reduced dramatically as harvesting is now in the second rotation.”
Brand said New Forests has begun deploying capital from its ANZFF 3, which closed last November, raising AUD873m.
New Forests, which manages timberland assets valued at some AUD4.5bn, also runs Asia- and US-focussed forestry funds.
The various New Forests funds own more than 940,000 hectares of forests, land, and conservation investments in Australia, New Zealand, Southeast Asia, and the US.